CWT is Working—Sort Of

My reasoning: The production report comes on the heels of the conclusion of the 3rd round of CWT cow culling completed this year. Timing is everything, and when you start counting cows, it is important in this type of number crunching.

The CWT’s Web site breaks down culling by region rather than state. So I did the same when I started counting cows. The problem is that USDA offers monthly, state-by-state analysis only for the 23 major dairy producing states—those which account for roughly 90% of U.S. milk production. Numbers for the remaining states are reported by quarter.

So to start, I used USDA’s January production report which gave cow numbers for all 50 states for the 4th quarter of 2008. I figured this was a good place to start, since it should have been prior to the 2008 CWT culling round that started in December.

I compared those numbers to last week’s report. Here, I used September numbers for the 23 major states, and third quarter averages for the remainder. Granted, cow numbers for the 25 “minor” states (I excluded Alaska and Hawaii because they’re not included in the CWT), could lag and some CWT culls might have been missed in this quarterly average.
Unfortunately, those are the number I had to work with.

The results are intriguing, nevertheless. Over the three rounds of CWT culling completed this year, the program removed nearly 226,000 cows. But U.S. cow numbers in the lower 48 states declined just 153,000 head. In other words, to remove a cow from the U.S. herd, the CWT needs to remove 1 ½ cows.

Regionally, the picture is even more interesting. If you consider the ratio of CWT cows removed to actual cow number decline, the Northeast and Southeast have the best performance. In the Northeast, 13,000 cows were taken through CWT but total cow numbers are down 23,000 head. The numbers are roughly the same in the Southeast, with 14,000 CWT cows and 23,000 total head decline.

In the West, 86,000 cows were removed through CWT. In terms of actual cow numbers, USDA reports 70,000 fewer cows in California. The rest of the West is down another 22,000 head (with Idaho and Washington both down 7,000 cows)

The Southwest is a fascinating picture. This region had the most CWT cows culled—92,000. And yet USDA is reporting the region down just 28,000 head. The big story here is that Texas continued to grow during this price debacle, up 26,000 head since the fourth quarter of 2008. Kansas is +2,000.
The Midwest, despite 20,000 CWT cows removed, is actually up 12,000 cows over last year. The only state in the Midwest region to see cow numbers drop is North Dakota, down 4,000 head.

CWT also idled some 827 dairy farms since the end of 2008. By region, Midwest, 257; West, 169; Southwest, 140; Northeast, 132 and Southeast, 129.

So what’s the message? CWT works in regions which are suffering severe economic stress. In regions where the stress is less severe, CWT isn’t nearly as efficient.

And it also begs the corollary question: Would this culling have happened anyway?

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Anonymous11/1/2009 06:08 AM

I also agree with millrun and virtualmilkman. Co-ops and NMPF have had goody-boys clubs for much too long. There needs to be a complete overhaul, term limits and NOT hand picked board members by ceo's. I too was thinking that PA Dairyman has family over at NMPF.

PA Dairymen11/1/2009 07:07 AM

You misinterpreted my post. I said NMPF was to blame for some things, but they are not the only one to blame.

Jim10/29/2009 07:30 AM

Real milkman, thanks for the solution and constructive ideas you put forth. Why guys like you should go out. Helps the gene pool of the rest of us dairymen.